TSLA Market Action: 2018 Investor Roundtable

[Boomer19]

The price range yesterday and today is very similar to a week ago on August 15 and 16, just before the NYT hitpiece. I would be absolutely shocked to see this continue next week.

where’s your guess on where it’s going then?

@MXWing ”first week of oct”
you mean because of the prod/delv numbers report?

 

[bdy0627]

where’s your guess on where it’s going then?

@MXWing ”first week of oct”
you mean because of the prod/delv numbers report?

No idea in the short term. I'm heavily positioned for a climb over the next few months. I think the market is very much waiting now to hear more news on the buyout. FUD seems to be getting less effective at moving the stock at the moment anyway.

 

[Fact Checking]

The price range yesterday and today is very similar to a week ago on August 15 and 16, just before the NYT hitpiece. I would be absolutely shocked to see this continue next week.

Maybe, but note a couple of crucial differences to Aug 15/16:

• There was a real attempt on $320 a couple of times yesterday, and it was soaked up brutally with high volume.
• Almost all buying stopped beyond $320 though.
• There was another attempt on breaching $320 in the end of day closing session which traded 220k shares (uncharacteristically high, considering the daily volume and trading range), and the closing price settled at $320.10 - which suggests that the buyer was willing to buy an unlimited number of shares in the closing session, but at $320.
• Also note the after-market and the pre-market: $320 was breached only for very short periods - but there was no buying beyond $320.

I.e. someone is telegraphing "$320 price peg" loud and clear.

Anyway, you could turn out to be right of course.

 

[Unpilot]

It seems odd to say that when volume is one third the usual amount ....that something is up.

But yeah I think there may be Cullusion!

 

[Joe F]

Cathie Wood, ARK Invest, due up on CNBC this hour.

 

[ggr]

Mod: bunchaposts moved to Bloomberg Model 3 Tracker . You know what to do. --ggr.

 

[Esme Es Mejor]

Tesla Still Has a Big Cash Problem

I’d like to apologize for linking to this garbage article. It’s by John Rosevear so, naturally, it’s narrative & conclusions are asinine.

That said, he included quite a few numbers that I found enlightening & encouraging (he, of course, found ways to see them as negative).

1. Accounts payable are shrinking as a percentage of revenue.

1. Quarterly cash flow through August 12 is negative $50 million. This is a huge improvement on Q2, and is trending strongly toward break-even, then cash-flow positive. As deliveries continue to increase & production continues to get more efficient, Tesla should get there before the end of the quarter.

 

[hellnoICE]

Interesting he didn't have the report to look at. There is a link in the dedicated thread to the report and I posted a breakdown of their cost estimates. Boils down to this:

Breakdown of Black, Long Range RWD, PUP Car
Price $49,000
Factory Cost $34,720
*Operations $10,650
Operating Profit $3,630

Breakdown of Black, Standard Range, RWD non-PUP car
Price $35,000
Factory Cost $30,250
*Operations $10,650
Operating Profit $-5,900

*Operations consist of D&A, Warranty, Freight, R&D, SG&A

Wow this video is huge. Looking at the reports, I am wondering if the SEC shouldn't go after UBS/Colin Langan. Misleading investors is securities fraud.
At best Colin's analyses are not competent at worst malevolent.

 

[winfield100]

Wow, today's TSLA price action:

• The $320 price barrier seems to be holding strong for a second day. Will it survive end of Friday weekly options expiry machinations?
  
• Only around $4 of volatility today - the historical average daily range for TSLA is $10-$17 (!). If the trading range gets reduced longer term due to the barrier and due to constant selling pressure then this would explain recent decreases in options premiums.
• TSLA ignored the big rise in NASDAQ and the usual correlations with macro were a lot weaker than usual. My guess is that some correlation/arbitration desks noticed the strong barrier and stopped correlation-trading TSLA.

I'm really curious about whether the barrier is going to survive today and whether it will be present next week as well.

If yes then one (speculative) interpretation of the barrier would be that:

• Elon Musk's Tesla buyout consortium is buying all shares below $320, and are putting them into a common pool.
• That pool will be distributed among the buyout partners, in proportion of their contributions to the $420 buyout. This solves the 'front running problem' between buyout partners rather elegantly.
  
• This reduces the cost of the buyout significantly, especially if they start raising the price barrier to get closer and closer to $420, to trigger more and more selling from shareholders who cannot or don't want to own $TSLAP shares.

Haven't seen anything like this before - does anyone know of a historical example of merger/buyout partners installing a price peg in the open market?

Or could this be a third party perhaps, a really strong buyer or merger/buyout arbitration trader?

to me, am amateur, it looks like someone took a bite of around 100,000 or so just after opening, and has been nibbling another 100,000 all day in as discreet an accumulation as possible

 

[winfield100]

Cathie Wood, ARK Invest, due up on CNBC this hour.

link for those of us who "Cut the cable" please, if any

 

[Joe F]

link for those of us who "Cut the cable" please, if any

Well, since it just aired, I'm sure they'll put the segment up here, unless you're looking for a link to purchase cable?

 

[MXWing]

where’s your guess on where it’s going then?

@MXWing ”first week of oct”
you mean because of the prod/delv numbers report?

Yes. We'll be able to extrapolate a lot for Q3 results and have a preview of Q4 by looking and what is in transit.

Though we'd have to figure out what was held back in Q2 to determine actual Q3 numbers.

 

[Boomer19]

Yes. We'll be able to extrapolate a lot for Q3 results and have a preview of Q4 by looking and what is in transit.

Though we'd have to figure out what was held back in Q2 to determine actual Q3 numbers.

just found out mine is “in transit” as we speak

can’t we get the stock to cooperate now?

 

[ggr]

Quarterly cash flow through August 12 is negative $50 million. This is a huge improvement on Q2, and is trending strongly toward break-even, then cash-flow positive. As deliveries continue to increase & production continues to get more efficient, Tesla should get there before the end of the quarter.

And how would he know this?

 

[winfield100]

Well, since it just aired, I'm sure they'll put the segment up here, unless you're looking for a link to purchase cable?

thank you, not yet tho
edit:
ah, paid version

 

[MXWing]

And how would he know this?

Elementary, my dear Watson.

He is a short. They know EVERYTHING.

 

[winfield100]

Elementary, my dear Watson.

He is a short. They owe EVERYTHING.

edited, for you

 

[mershaw2001]

As this is the market thread, I have to say that I was surprised at the low volatility in the stock- particularly the options market- today. I took the opportunity to buy back short call options and buy a few far out of the money options with far-out-of-the-money strike prices two weeks from today (400 strike, 10x $0.29). I am surprised because options market is not pricing a move in the next two weeks as likely at all.

I'll make a prediction- that we see a proposal come in sunday evening, before the open of market. And I think we see it for 420 or 450. For some reason the difference in the stock price seems substantial but if you were to say "tesla is valued at 80 billion" vs "tesla is valued at 86 billion" I don't feel the difference is so substantial. Especially more so because the party who is buying shares doesn't have to buy the whole company, only about 1/3 (my estimate even after seeing the math using elon's "2/3 will keep shares" that shows that no shares have to be bought to go private).

I'm not suggesting that the deal goes through, only that Elon floats a proposal to the board. I think his eagerness to tweet suggests he is close to pulling the trigger.

 

[Joe F]

thank you, not yet tho
edit:
ah, paid version

There's also a free version, but it's not the entire interview. Moronic attempts in the long version to throw shade on Tesla and Elon by Sara Eisen (very annoying person, IMHO) easily deflected by Wood, also IMHO.

EDIT: And fron a market action perspective, most everything CNBC does seems to be an attempt to discredit Elon, and drive the SP down. Hopefully investors see through their negativity...

 

[PaulusdB]

..If yes then one (speculative) interpretation of the barrier would be that:

• Elon Musk's Tesla buyout consortium is buying all shares below $320, and are putting them into a common pool.
• That pool will be distributed among the buyout partners, in proportion of their contributions to the $420 buyout. This solves the 'front running problem' between buyout partners rather elegantly.
  
• This reduces the cost of the buyout significantly, especially if they start raising the price barrier to get closer and closer to $420, to trigger more and more selling from shareholders who cannot or don't want to own $TSLA

...

The barrier seems real. The buying party being closely connected to the buyout partners makes sense. The thought of slowly raising the bariier crossed my mind as well. $100 over three months would be ~ $1 per weekday. That is a very easy benchmark for buyout progress.

Maybe, but note a couple of crucial differences to Aug 15/16:

• There was a real attempt on $320 a couple of times yesterday, and it was soaked up brutally with high volume.
• Almost all buying stopped beyond $320 though.
• There was another attempt on breaching $320 in the end of day closing session which traded 220k shares (uncharacteristically high, considering the daily volume and trading range), and the closing price settled at $320.10 - which suggests that the buyer was willing to buy an unlimited number of shares in the closing session, but at $320.
• Also note the after-market and the pre-market: $320 was breached only for very short periods - but there was no buying beyond $320.

I.e. someone is telegraphing "$320 price peg" loud and clear.

Anyway, you could turn out to be right of course.

I agree, adding this as a plausible explanation for today’s unusually low volume. The barrier effectively taught sorts and day traders over the last two days that the usual games and tricks don’t work anymore. No weak longs to scare, no bear traps, no triggering stoploss levels, etc. Possible it’ll even kill the FUD stream in the media, now that no ‘dramatic effects’ on the stock price can be reported in sync with FUD messages.

Can this setup be pre-engineered? (Pun intended.)

Boy, am I looking forward to going to the opening night of the movie that is going to be made from this.